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Tax Publishers
Claim of depreciation on goodwill and intangible
assets - post facto court approved amalgamation scheme
Facts :
Assessee as part of a court approved scheme of
amalgamation, the company Rohm and Hass (India) Private Ltd (RHIPL)
was merged with the assessee in the AY 2016-17. There were certain
intangible assets acquired as part of the "purchase method" of
the merger in the hands of the assessee. Assessee claimed depreciation on these
intangibles goodwill, customer relations, distribution network etc. AO and
CIT(A) disallowed the same citing that there were no intangible assets which
were found in the books of the amalgamating company RHIPL. Thus assessee
was ineligible to claim any depreciation. Assessee pleaded that vide Smifs
Securities Ltd (2012) 348 ITR 302 (SC) : 2012 TaxPub(DT) 2430 (SC)
depreciation was allowable on goodwill and on such intangibles. On higher
appeal by the assessee -
Held against the assessee by remanding the case to the AO
for de novo consideration as the first year of depreciation claim on
the intangibles in the earlier assessment year AY 2016-17 itself was under
appeal - accordingly the claim will need to be dealt in line with the outcome
of the said earlier year appeal.
Case : Dow
Chemical International (P) Ltd. v. Dy. CIT 2023 TaxPub(DT) 5571 (Mum-Trib)
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